New report - Welfare Bums

July 02, 2016 New Zealand Taxpayers' Union

Welfare Bums: Adding up the cost of corporate welfare in the 2016 budget

Corporate welfare amounts to more than $800 per New Zealand household, according to a calculation by the Taxpayers’ Union contained in a report released today. The report, entitled Welfare Bums, is authored by economist Jim Rose.

The report updates the previous Taxpayers’ Union reports, Any new kids at the trough?, which scrutinised Budget 2015, and Monopoly Money, published soon after the 2014 Budget.

The key findings in the report are:

Corporate welfare will cost taxpayers $1.36 billion this year, up from $1.2 billion in the 2015/16 financial year

The Government will spend the equivalent of $803 per household on corporate welfare, compared to $723 per household spent in 2014/15

Handouts to the private sector in Science and Innovation have grown to $250 million, co-funding “commercialisations” and start-ups.

The primary sector and communications are the other main corporate welfare growth areas, with over $375 million being handed out to private providers installing ultra-fast broadband and irrigation.

Taxpayers continue to throw money at KiwiRail, which since 2008, has been given $3.5 billion worth of subsidies, and has cost the taxpayer a staggering $14.4 billion in asset write-downs.

Corporate welfare is where politicians try to pick winners and the taxpayers lose,” says Jordan Williams, Executive Director of the Taxpayers’ Union. “It robs middle-class taxpayers to reward the well off and politically connected while also hurting the private entrepreneurs creating jobs in industries which don't qualify for government handouts.

Steven Joyce has turned the Government science spend into the modern day equivalent of ‘Think Big’. As an example, he has shifted money that used to go to Universities and Crown research institutes to an American-owned rocket company, which has sucked $25 million of government funding, whilst competing with Silicon Valley billionaires.

Taxpayers and politicians from all sides of the political spectrum should ask whether the public gets value for money from these business handouts.

For every dollar spent on corporate welfare, there is one less dollar for education, health, or investment by the taxpayer who earned it.

Corporate welfare is defined as government expenditure used to subsidise businesses or specific industries. Hard copies of the report are available on request.

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The Taxpayers' Union is 100 per cent politically independent. We are not affiliated with any political party and will never become a political party. We work with all parties, MPs or candidates that share our objectives. We work with any and all political parties and other organisations to expose government waste and low-quality government spending. Individual members have their own political involvements, but as an organisation the Taxpayers’ Union is vigorously independent in promoting the interests of New Zealand taxpayers.